In a couple of weeks, we expect the European Commission’s revised proposal for the climate taxonomy. 10 countries have protested against what they see as unfair treatment of the bioeconomy. What does that mean and what will?
In recent months, the concept of taxonomy has taken on a whole new meaning, from a way of arranging plants and animals to EU’s method of more systematically classifying investments and activities as environmentally sustainable, or not. To be considered sustainable, a business activity must clearly contribute to improved sustainability within at least one of six dimensions. If the business meets one of the goals but at the same time clearly is detrimental to one or more of the others, it will not be classified as sustainable.
The entire taxonomy is to be launched in 2023, and in November 2020, the European Commission presented a proposal for the first two parts, reduced climate impact and climate adaptation. Their proposal led to more than 40,000 comments, many of which were proposals for change, big and small. Among the biggest outcries was the Commission’s view on nuclear power, natural gas, hydropower and bioenergy, where companies, industry organizations and several governments want a more permissive view.
Estonia, Finland, Latvia, Lithuania, Hungary, Poland, Slovakia, Slovenia, Sweden and the Czech Republic jointly state that the criteria in the taxonomy in its current form run counter to the aim of promoting further investment in sustainable renewable energy. They emphasize that all forms of liquid, solid and gaseous bioenergy that meet the sustainability criteria according to the EU’s already developed renewable directives, should also be classified as sustainable according to the taxonomy. This is important, according to the countries, due to the crucial role of bioenergy in achieving EU’s climate goals, which in turn require sharply increased investment – which they believe is counteracted by the current proposal.
According to the proposal for the delegated act, bioenergy, such as biogas, is not considered to be a sustainable solution but only a transitional solution, while electricity and hydrogen are classified as sustainable. The requirement that the activity must not go against any of the other environmental goals is considered difficult for bioenergy. Fossil-free Sweden even states that the proposal would threaten the confidence in the EU system, since the taxonomy is not in line with previous EU directives such as the Renewable Energy Directive, RED. The aim of the letter is thus that the taxonomy should be designed so that it leads to increased investments in bioenergy. Against this are i.a. Greenpeace, which supports the Commission’s current line that biofuels should be seen as a transitional solution, emphasizing that nothing prevent more biofuel-friendly countries and actors from continuing their work, only that the classification will not benefit them.
At the end of April, we await the Commission’s final proposal, with a gradual increased understanding over the next weeks. I expect the Commission to adjust its proposal so that it is better in line with what already exists, such as the Renewable Energy Directive, and what the Commission’s own expert groups have proposed – both because ten Member States request it and because it is a well-known secret that other parts of the Commission have not been fully supportive of everything that the Green Deal-Commissioner Frans Timmermans has put forward. But I do not expect a full u-turn on any of the matters brought up in the taxonomy.
As this is a delegated act, the Commission decides for itself, unless there is a qualified majority against the proposal in the European Parliament or the Council of Ministers; by the elected representatives or by the Member States. With a revised and improved proposal, this is unlikely to happen.
Mattias Goldmann with material from Stina Magnusson and Malin Setterström